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An electric-auto maker valued at $1.4 billion last year is already folding. Buckle up for more carnage

June 13, 2022, 4:49 PM UTC

A big name in electric vehicle startups ran out of juice over the weekend. Based on the current trajectory of the EV market, it won’t be the last to get squeezed.

Electric Last Mile Solutions, a Michigan-based outfit that aimed to assemble commercial vans and trucks, announced late Sunday that it will liquidate after failing to secure additional capital or find a potential buyer, Bloomberg reported. The shutdown comes 12 months after Electric Last Mile went public through a special-purpose acquisition company, raising $379 million in a deal that valued the firm at $1.4 billion.

Electric Last Mile’s collapse, the first for an electric-auto maker that went public through a SPAC, followed executive upheaval and internal chaos. The company’s chairman and CEO both resigned in February after an internal investigation uncovered improper share purchases before the SPAC deal became public. The startup’s auditor quit one week after the resignations, and Electric Last Mile still hasn’t filed a 2021 annual report or first-quarter 2022 financials.

But Electric Last Mile’s demise just two years after its founding fits into a larger pattern of EV startups quickly hitting the skids, potentially signaling a faster-than-expected shakeout in the sector. Several other once-promising EV companies are running out of runway, as legacy automakers belatedly begin to flex their horsepower and manufacturing costs spike.

Canoo, an Arkansas-based EV startup that went public via SPAC, spooked investors last month when it declared in a regulatory filing that “there is substantial doubt about the company’s ability to continue as a going concern.” Canoo CEO Tony Aquila tried to quell fears in an interview with Jalopnik, pointing to roughly $600 million in accessible capital, but investors remain pessimistic. The company’s stock is down 62% year to date, while rumors of a potential acquisition by Apple float around.

Another SPAC startup, Ohio-based Lordstown Motors, continues to teeter on the edge of insolvency. Company officials said the automaker likely needs to secure more funding and boost its market value to stay in business for another year, even after selling its factory for $230 million, the Wall Street Journal reported in mid-May.

Meanwhile, one of the older EV startups, Faraday Future, is presently a mess. Five years after unveiling its signature electric vehicle, the FF 91, the California-based company still hasn’t put a commercially sold vehicle on the road. Potential buyers aren’t holding their breath: Faraday Future reported just 400 preorders for the FF 91 as of last month, per CNET. Faraday Future’s board demoted the company’s founding CEO in February, and shares are down 58% year to date.

Even the biggest names in EV startups, Rivian and Lucid, are encountering some traffic. 

Neither company is anywhere close to bankruptcy—Rivian is buoyed by several big-name investors, while Lucid has the backing of Saudi Arabia’s Public Investment Fund—but both lament supply-chain crunches hampering their ability to ramp up manufacturing. Wall Street continues to punish the two companies: Rivian shares are down 72% year to date, while Lucid shares have tumbled 56%.

For EV startups, the carnage is just beginning.

Deep-pocketed legacy automakers, such as Detroit’s Big Three, Volkswagen, and Toyota, have pledged tens of billions of dollars in EV investments—vastly more money than scrappy startups can raise from public and private markets.

The world’s most-dominant EV company, Tesla, also looms large. The company’s rapid expansion of manufacturing capacity, combined with its battery and raw material resourcing prowess, make it well positioned to maintain the EV pole position.

As Electric Last Mile shows, the opportunity for many EV startups to succeed is in the rearview mirror. Acquisitions, fire sales, and bankruptcy declarations may be closer than they appear.

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Jacob Carpenter


A crypto calamity. Cryptocurrency markets crumbled Monday as broader markets wavered and two high-profile companies paused some transactions on their platforms. The value of Bitcoin fell below $24,000 as of early Monday afternoon, dropping to its lowest price in 18 months, after a 14% decline over the past 24 hours. Ethereum prices also tumbled 17% during the same time frame, slipping to its lowest price since January 2021. The nosedive followed news that Celsius, which reported about $11.8 billion in assets in mid-May, would halt transactions for an indefinite period of time to “stabilize liquidity.” Binance, the world’s largest cryptocurrency exchange by trading volume, also paused Bitcoin withdrawals for about three hours Monday morning because of “a stuck transaction causing a backlog.”

A little too real? A Google engineer says one of the company’s artificial intelligence systems has become sentient, claims that the company and other experts in the field refuted. Blake Lemoine, an employee in Google’s Responsible AI division, told the Washington Post that his conversations with a company chatbot led him to believe in the program’s sentience. Google officials, who placed Lemoine on paid administrative leave after he disclosed private information, said internal researchers have analyzed the claims and deemed them inaccurate.

A billion-dollar bug. New research suggests one in six ads on a streaming service run when viewers’ televisions are turned off, an issue that could cost advertisers more than $1 billion annually, the Wall Street Journal reported. The analysis by ad-buying company GroupM and ad-measurement firm looked at the financial fallout of streamed shows remaining on after customers turned off their televisions, a common occurrence for those who access streaming through a piece of hardware. The issue does not occur on smart televisions with built-in streaming apps.

The price of equity. Google will pay $118 million to settle a gender discrimination class-action lawsuit brought by about 15,500 female employees, Bloomberg reported late Friday. The agreement followed claims that the Alphabet unit paid women less per year than men despite carrying out similar job functions. As part of the settlement, independent experts will review Google’s hiring practices and pay equity studies.


Khan vs. the courts. Federal Trade Commission Chair Lina Khan might have plans for bludgeoning Big Tech, but she’s set to face plenty of legal resistance. As Axios reported Monday, conservative-minded judges have become a powerful force in the federal judiciary, taking particular aim at the so-called regulatory state. Several recent rulings portend legal showdowns that could go against the FTC and other federal agencies in the Biden administration. Khan went on a media tour last week to tout her plans for regulatory rulemaking, arguing that her agency shouldn’t wait for Congress to tackle data privacy and targeted advertising issues.

From the article:

The administration’s plans to limit monopolies and rein in Big Tech will run head-on into judges eager to curb the authority of the Federal Trade Commission and every other independent agency.

What’s happening: Cases against federal agencies are starting to pile up, including a recent ruling by the Fifth Circuit Appeals Court limiting how the Securities & Exchange Commission can use its internal administrative court.


Meet the Meta executive tasked with bringing Mark Zuckerberg’s high-stakes metaverse vision to life, by Jonathan Vanian and Jeremy Kahn

Ethereum developers will likely delay the “difficulty bomb” but say the merge timeline is unchanged, by Taylor Locke

Google searches for abortion clinics lead to hundreds of results for “fake clinics” with friendly names in U.S. trigger states, by Sophie Mellor

Over 2,000 Terra investors say false marketing is what caused them to lose their money, by Oliver Knight and CoinDesk

JPMorgan on its crypto plans: “The overall goal is to bring these trillions of dollars of assets into DeFi,” by Ian Allison and CoinDesk

“Summer camp for moguls”: Sun Valley confab could lead to some awkward encounters, by Christopher Palmeri and Bloomberg

The speech that muddied the crypto waters, by Stu Alderoty


Back in action. The ink is officially dry on a Squid Game sequel announcement. Netflix confirmed Sunday that the South Korean smash hit will return for a second season of gory games, making good on the company’s promise to bring back the show. The surprise sensation became one of Netflix’s most-watched titles in 2021, attracting 111 million viewers in its first month alone. Netflix officials didn’t say when season two will arrive, but the debut can’t come fast enough for the streamer. The company’s shares are down 71% year to date as subscriber growth grinds to a halt.

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